These 3 steel stocks are tough picks
Metal and mining stocks have been a major highlight in the stock market this year, and with some analysts expecting a commodity super-cycle ahead, there could still be a lot of ups and downs for investors in strong companies in the sector. Steel stocks, in particular, stand as a great alternative to the demand for important metal rebounds following the epidemic. The conflict in Ukraine has pushed up the price of steel further due to the shortage of pig iron and it is easy to understand how these companies could be for another big year.
What we have now is an increasingly tight supply of steel with increasing demand, which has created a perfect environment for companies dealing with these valuable assets. This is why we have now compiled the following list of 3 Stellar Steel stocks to buy. Each of these companies offers a great way to gain exposure to steel and move forward for a sustainable assembly.
Let’s take a closer look at what makes these companies stand out.
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United States Steel Corporation (NYSE: X)
First, the United States Steel Corporation, an integrated steel maker with a production capacity of over 22 million tons at plants in North America and Eastern Europe. US steel is benefiting from high steel prices both internally and in Europe, and the company has been making some exciting acquisitions over the past few years that really should pay off in the long run. Significantly, the acquisition of Top-Tier Mini Mill Big River Steel could be a strong positive for the future, as the strategic move improves shareholder returns through cycles of North America’s only customer-centric “best of both” steelmakers, integrated and mini-mill technology. Please.
US Steel recently announced that it plans to build a new mill in Arkansas with two electric arc furnaces, which will lead to more powerful steel production. The stock has risen more than 54% year-over-year and could be a great buy-dip opportunity for investors to consider moving forward. The company will announce its Q1 earnings on April 28, so keep an eye on how the stocks work both before and after the release.
The Brazil-based company is one of the world’s largest iron ore miners and one of the world’s largest producers of nickel, making it a great option for exposure to metals and mining companies. Vale also produces copper, metallurgy and thermal coal, gold, silver, cobalt and platinum group metals, although the company derives most of its revenue from iron ore. The stock burned in 2022 and rose more than 41% year-over-year, yet investors may still want to consider adding shares due to its 3.5 P / E ratio and ever-improving balance sheet.
It is worth mentioning that Vale has recently reinstated its dividend payment, which means investors can take advantage of an attractive 13.39% dividend here. There’s also a lot about how the company’s sales grew 36% in 2021, which was the result of higher production and higher prices across all products. While there are some risks related to declining steel demand in China and potential liability for the failure of the Brumadinho Dam in 2019, Val will still outperform the market environment with strong steel prices and may be a great stock to consider adding at this time. .
Reliance Steel and Aluminum Corporation (NYSE: RS)
If you are interested in another fundamentally strong steel stock that can help you run the current tailwinds influencing the industry, Reliance Steel and Aluminum must be on your radar. It is the largest metal service center company in North America and an organization that provides materials management and metal processing services to more than 125,000 customers in various industries. Investors should be drawn to the fact that Reliance Steel and Aluminum serve a wide variety of industries and are ready to recover the end market such as energy, commercial space, and heavy equipment in the coming quarters.
The stock is also a tough pick for its 1.9% dividend yield and 12.74% 3-year dividend growth rate (CAGR). The company repurchased about 2.1 million shares in 2021 for 324 million, a testament to its financial strength and commitment to rewarding long-term shareholders. With more than 16% of shares per year and close to reaching new all-time highs, this is a steel stock absolutely worth adding to your watch list at this time.
